How often do you get your paycheck?

One of the BlogHer featured posts (Mrs. Micah's Credit Cards: Billing Cycles and Bimonthly Paychecks) talked about a mis-match between pay dates and credit card due dates. It reminded me of just how much I used to agonize over this issue, back before I had my finances under control.

Over the years, I've been paid on just about every paycheck schedule: weekly, biweekly, half-monthly, and monthly.

The schedules

Biweekly seems to be the most common, at least in the United States. I know a lot of people who figure that one check goes for the rent or mortgage and the other check goes for a car payment or some other major expense. The pay dates tend to shift around in the month, though. Someone who counts on, let's say, the second paycheck of the month to pay their next month's rent, can get burned if the check comes unusually early and the money gets spent before the rent check gets written. (It used to be that getting the check unusually late could also be a problem--a check that arrived the last day of the month might well not have cleared before rent was due on the first. Direct deposit and ACH has probably made that a non-issue for most people.)

Half-monthly is almost like biweekly--you still get a first and a second paycheck every month--except that you miss out on the best thing about biweekly paychecks: the two months a year when you get an "extra" paycheck, because a 52-week year means that there are 26 biweekly pay periods but only 24 half-monthly ones. If your finances are under control, there's really no difference between getting 1/24th of your annual salary twice a month or 1/26th of it every two weeks. But for a person who's living paycheck-to-paycheck, those three-paycheck months can cover all manner of careless spending.

Weekly sounds great to someone who's gotten a bit too used to saying, "Wait until we get paid and then we can buy that." In practice, though, it's kind of scary, because there are ordinary monthly expenses that can't be covered by a single paycheck. Where one biweekly paycheck will commonly cover rent or the mortgage, one weekly paycheck probably won't (unless you're living in a very cheap apartment). All of a sudden, that simple budgeting scheme (first paycheck covers the car payment, second paycheck covers next month's rent) doesn't cut it any more. All of a sudden, you're having to save and budget just to get your bills paid.

Monthly has the advantage that it's the same frequency as most of your bills. Times when I've been paid monthly, the payment typically comes a few days before the end of the month--early enough that the check had cleared in time to pay the rent on the first. In my experience, it was actually better than weekly. With monthly you have to budget, but at least you have the whole month's money in one big lump.

Personal history

I got paid biweekly at my first full-time job. Then, my second employer was an old-line industrial firm that ran a weekly payroll for all the factory workers, and found it easier to just include us software types in that payroll.

With a biweekly paycheck, my bill paying was pretty simple. I'd let bills pile up as they came in, and then I'd pay them all when I got paid. It was pretty unusual for two weeks worth of bills to come to more than one paycheck. Once I moved to weekly paychecks, though, that changed. It was perfectly ordinary for one weeks worth of bills to be more than one paycheck--it happened at least twice a month.

I think that experience was what first prompted me to get my finances under control. I cut back a bit on spending, got my credit cards paid off, let some money accumulate in my checking account. When my next job turned out to pay monthly, it was not only no big deal, it was actually kind of a relief--I didn't need to do nearly as much figuring and planning ahead. I got my money, and then I paid my bills over the course of the month. It was easy.

A matter of class

There's some degree of class distinction in pay frequencies. I don't know if it's still true, but as late as the mid-1980s, payrolls in England were strictly divided between the middle-class folks (who got paid monthly by direct deposit to their bank account) and the working-class folks (who got paid weekly by their boss handing them an envelope with actual cash money inside). Even in the US there's a general sense that the working-class folks need to get paid more often (because they can't be expected to budget wisely), with the implication that people who get paid less often must be of a higher class.

Under control

Of course, none of it matters, once your finances are under control. The money flows in whenever it flows in, it flows out when the bills are due--and the surplus goes into whatever savings or investment vehicles you've selected. A large fraction of my income is now paid either annually (mutual funds that pay dividends just once a year) or semi-annual (interest payments on treasury securities). It's all the same to me.

I remember vividly the shifts from biweekly to weekly to monthly, because they made a huge difference in the way I managed my money. Since then, I've had several different payroll schedules--biweekly, half-monthly, back to biweekly--but I scarcely remember, because it never really made a difference after that.

Of course, while you're in the process of getting your finances under control, you're likely to be especially aware of these matters. It's necessary to pay close attention to the flow of money into and out of your life, in order to get a handle on your finances. It may be of some comfort to know that, once you do, it turns out not to matter so much any more.

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Guest #1

I actually really like weekly paychecks. My husband and I both get paid weekly even though we are in wildly different fields, and one of his checks pays the mortgage because we pay biweekly. We take out spending money once a week instead of once or twice a month, and bills get paid as soon as we get them.

Being a pensioner means, you guessed it . . . once a month pay. While we have numerous other sources of income, they all post - that's right - once a month. For extra fun, when my husband was active duty we always got paid not only twice a month (1st and 15th) but ON TIME! Now that's he's technically "retired", they have a habit of taking a few days extra, especially around holidays and weekends and such. But like the person above, we have reserves to roll with the punches. Kind of the pits that we have to, though. At least I think so. It's not like we didn't pay our dues.

Especially in those long, 31-day months where the 1st never seems to roll back around. Fortunately, I am now paid biweekly and I like it. With 26 paychecks a year, two months have three paycheck dates and monthly deductions do not occur (health insurance, etc.).

Used to be paid once per month, but am now paid once a week (and get 3 or four "extra" paychecks during the course of the year). I decided to treat the money as if I were getting paid only once per month, however - saving up four weeks at a stretch, then paying bills and such - so I don't get lazy with "oh, I can go ahead and get it now, I get paid this week!" So all my bills are paid in one swoop, and I give myself a lump sum cash allowance for work snacks and the like to last for a month. It's all a mind game, for sure, but it keeps me on fiscal track.

As a freelancer, I get paid 30-45 days after I invoice a project (and some of the projects I work on are 2 months or more in completing). It'd be a bit of a nailbiter if I were the sole income of the household! For budgeting purposes, it works out so that when the checks are coming in slowly, it subconsciously puts a throttle on our spending. And when the checks come in in big bunches, it's easier to move the sudden surplus to savings.

I get paid monthly (and on time). And it's always for the same amount unless I just got a raise.

Let me just say that a lot of people around here are suddenly getting very frugal by the end of the month. Sometimes the whole last week. I've heard of people who make money by lending it to co-workers the last week of the month and charging interest.

I like it for record-keeping purposes. After getting my paycheck, I enter that into my checkbook (quaint, I know), then enter all the automatic payments that will come due. From that total, I subtract the amount I have charged on my credit cards so far and then I remove all the remainder except for $750 and put it in savings of some kind. (Either I'm refilling my savings account or moving the money to a high-interest savings account or moving it to investments.) I'm always hoping to move a big pile of money out of there, so I look forward to all this.

Then I go ahead and look up how much my investments are worth and calculate my net worth.

but hubby's pay cycle & mine are a touch off from each other so we end up with a payday every week.

this has been useful for those occasions where life goes pear-shaped, but i actually liked and miss getting paid 1st/15th as it was a better fit for how i prefer to manage the budget. (not to mention salary style where any oddities hit the following payroll rather than hourly where those oddities hit the same cycle.)

I get paid weekly and absolutely love it!! First, it was a godsent when I first started at my current job. Second, I base my budget (and how much I save) on a 4 week month, every third month has a fifth Friday (and a fifth payday). That fifth paycheck goes straight to my debt, and is probably the biggest reason I've been able to pay off over $9000 in debt since June.

I get paid the last business day of each month. 12 equal paychecks throughout the year. It simplifies my life for the most part b/c I was able to get most of my billers to change my due dates to fall around the 1-2nd week of the month. I like being able to pay all the bills in one fell swoop. It CAN get tough rationing out my discretionary spending allowance for the entire month -- especially months like January when there are nearly 5 full weeks when there are typically only 4 most months.

I believe for my 30+ years of employment, I've always been paid every other Friday, works out fine. They're automatically deposited to my checking account. I have a chunk automatically deposited to my 401K. I do my best not to take any out cash these days unless I have to, rarely use a charge card, and pretty much have the same boring but effective routine. For groceries I use a debit card and buy pretty much the same things. I try to go mostly paperless bill-wise and pay each as I get the email alerts; I realy like this, I pay them online from my checking account whenever possible. The second check in the month is very specifically for the mortage, and I'm trying to pay an extra $200 per month on that and would love to double it. As I said, boring, but this works well for me. I should be putting more into my savings account but got spurred to pay down the mortgage a few years ago, which I feel very good about doing. I've already managed to knock a few years off that, which makes me feel great. My "fun" money that I do allow myself a bit of goes for stuff at thrift stores, but I've gotten highly selective about what I buy. Most of the time, I don't care so much about shopping, must be getting old, ha-ha.

I get paid biweekly at my job. Most months I'll get two checks although twice a year I'll get a third check, and a bonus paid out in March. I like this system because I can live off the two checks and toss the third checks and the bonus into the bank. I'm tricked into living below my means and I hope my colleagues view the system in a similar fashion.